Skip to main content

tv   Bloomberg Technology  Bloomberg  December 17, 2019 11:00pm-12:00am EST

11:00 pm
♪ taylor: i'm taylor riggs in san francisco for emily chang, and this is "bloomberg technology." coming up in the next hour, goldman to the rescue. wework gets financing. we will have the latest on the credit lifeline. plus, proposed tariffs pushes apple to the forefront of the u.s.-china trade standoff in 2019. the relationship with president trump may have helped the company avoid a steep levy. we will get thoughts from gene
11:01 pm
munster. hospitality disruptor. short-term holds that combine elements of hotels and apartments. we will hear from the ceo. but first to our top story. record highs on tuesday on averages, but something interesting happened during the day. the s&p 500 tech index closed down slightly. is this a sign of trouble to come? joining us to talk about what this means is bloomberg's abigail doolittle. i want to take a look at a chart i'm showing in my terminal which highlights some of the profit taking. i am wondering if that is what happened today given the overbought levels on the tech sector. abigail: i think you are dead on with that, taylor. that is exact a what that represents, you little bit of profit-taking. that stock up so much this year, and that is really what makes today so interesting, the nuances you were talking about, the nuances, each finishing at a record high.
11:02 pm
the stocks and chip index also finishing i record high. the reason that stands out is they are leading up all year, up more than 4% on the year, on pace for its best year since 2009. when you start to see a mini divergence like that, the first not record close in 4 sessions, you want to pay attention, especially without chart showing the rsi can overbought territory but a lower high from the last time it was overbought. plus, the tech sector right now, more than 10% above its 200 day moving average. the last time that happened, consolidated down. could be a push to the downside in the weeks and months ahead on exactly what you are talking about. a monster year for stocks. taylor: it has been a monster year. another sector we continue to follow is the stocks index. i want to come and take a look at a chart we are showing inside my terminal. a lot of this is on demand pricing. mizuho, they are out with a note
11:03 pm
saying we could see a bottoming out in these prices. what are you seeing? abigail: this is a little puzzling to me. "the official bottoming" for pricing. the chart we are looking at, nand was on bottom. it was showing a lower low. on the other hand, stocks going so high. it is the idea that memory pricing is going to recover. that chart does not support it. very difficult to call a top or bottom. you want to see the last high ticket out, suggesting there is a true bottoming process. that is certainly not showing in that nand chart, at least yet. taylor: i want to pulled it over into a stock specific company we are continuing to look over today and tomorrow, which is micron. also lacking. you have seen micron continue to
11:04 pm
jump higher, getting another upgrade this morning ahead of earnings tomorrow. what do you make? abigail: that is another extraordinary chart. divergence again with nand. the lower low. nand is interesting because it is the processing memory. it is used more so by iphones. dram typically leads. that is the memory used for storage and servers. but that chart does not look all that different from the nand chart. it looks like unless these analysts know something that will cause the pricing to go well higher, maybe they are giving ahead of themselves. it looks like a bottom could be setting up, but one that might happen in the second half of 2020. meantime, some stocks up 70%, 80%, 90%, 100% on the year. it could leave them high and dry to start the year. the street is doing what they are good at, setting themselves up for their client. next year, making the big calls.
11:05 pm
stocks are falling. next year for the chips could be a bit painful perhaps. taylor: i want to bring this full circle and look at some of the software stocks we talk about so often. one of those is microsoft. red bush also taking a look at microsoft this morning, saying they could be poised to win some of the cloud wars particularly when they face amazon. how is microsoft going to take on amazon when it comes to the public cloud market? abigail: that is a great question, taylor. that will be interesting to watch their strategy evolve with time to see if they are able to do that, but red bush is very positive on that possibility. saying while amazon has been winning it, they have the growth potential there. something i like to point out with microsoft slightly down on the day, that goes to your first point, profit-taking. microsoft up more than 50% on the year, even though top and bottom line growth just in the low teens.
11:06 pm
investors starting to weigh that a little bit. that is weighing on the tech sector. it will be interesting to see whether more chips come off the table, but it sounds as though over the long-term, the cloud business will continue to help propel them perhaps higher. taylor: thank you to bloomberg's abigail doolittle. now to another top story we continue to follow. wework obtained $1.7 billion in financing in a fundraising push by goldman sachs. bloomberg has learned the deal could free up roughly $800 million in cash for the struggling office-sharing company. it is the first hurdle cleared. it pledged to put together $5 billion in debt financing for wework as part of a bailout package. we are joined by gillian tan. what do we know about the $1.75 billion in the midst of the broader $5 billion package? gillian: goldman has underwritten this. they are tricked to syndicate out of the $1.75 billion line of
11:07 pm
credit for the bank to maybe retain a portion of it obviously. it frees up wework to spend on growth to reinvest in the business, to really focus on its core sharing business in its key markets that it identified and to eventually get its goal of being profitable. taylor: do we know anything about the $3.25 billion as part of the broader restructuring? gillian: we do. we know it will be $1.1 billion up secure and then $2.2 billion of unsecured. we are not sure. they have not come to market yet, so it is not clear. but again, bondholders really appreciated seeing goldman step up. up anyone since in the past month alone and will continue to go up as the package is put together. taylor: i like that you also mentioned freeing up $800
11:08 pm
million in cash. so much of the endless reaction comes on the use of cash. you talk about investing and growth. is that where they want to see this $800 million in cash being spent? gillian: i guess it continues to be about growth, but it is about profitable growth, instead of going at all costs, which is what the company was on previously. the company is focused on its key markets, like london, new york city, san francisco. they have identified 12 markets. already committed to a bunch of spaces. they need this cash to construct to fill out the spaces, to continue growth in markets that they believed can eventually be profitable for them. taylor: you smartly brought up the bond price reaction. we say the smart money is in bonds. investors are believed. i want to take a look at the chart we are showing in the terminal, which is $.82 on the dollar, a readout off of the $.70 on the dollar we had before
11:09 pm
news of this deal was struck. how long though do i wonder can the company last before it goes back and tries to get a new loan? gillian: that is the $3.25 billion we just touched on. it is unclear if these bonds will be taken out or if they will be left hanging out there. i think they expect the companies to come back to market early in 2020, which is around the corner now. taylor: bloomberg's gillian tan, thank you for joining us. facebook says it is hiring contractors to one of his partners for a new program. the findings will be shared with a third-party back checkers as additional context as they do their own official review. the company says they are partnering to make sure that the pool of community reviewers represents the diversity of people on facebook. coming up, big tech is on a quest for dominance in consumer gaming.
11:10 pm
we will discuss how it is all shaping up. syntax with one of the latest unicorns. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app,, and in the u.s. on sirius xm. this is bloomberg. ♪
11:11 pm
11:12 pm
taylor: apple wallet, uber money, checking accounts, it seems like everywhere you look, big tech is getting into the financial services game. so what is that trend doing to syntax? henrique dubugras is here. he is the ceo of a brex, which minted it's a unicorn this past
11:13 pm
summer with the $2.6 billion. welcome to the program. i wonder given how big competition is, how competitive the space is, where do you see the next step in terms of opportunities? henrique: thank you so much for having me. i believe there is a clear distinction between distribution and actual innovation in financial services. i think a lot of the big tech companies, what they are doing is creating new distribution channels for existing products. so for example, amazon's credit card is issued by jp morgan and american express. i truly believe that if there is no technology development in the back end, it will not change much. i think a love the opportunity are for both firms that actually rebuild the technology behind it and do not use the technologies built by the bank. taylor: so as you talk about
11:14 pm
that and some of the partnerships, i noticed you have a partnership with mastercard. what are you hoping to bring them? what are they bringing you in terms of the technological innovation? henrique: the exchange of knowledge. they have been working with banks and a global market and have a key beleaguered a lot of knowledge and expertise over the years. we bring in the side of technology and education from silicon valley. we can learn from them and they can learn from us. we get to use their big distribution network. brex card works anywhere mastercard works. taylor: how are you hoping to differentiate yourself? we talk a lot about uber money for example. with your technology, but also you hoping to use to try to make sure that you stand out in what is a very crowded field? henrique: the first thing we do is focus on businesses instead of consumers.
11:15 pm
a lot of the focus has been on building financial services for consumers. number two is we rebuilt the entire system from scratch. we don't use any legacy software from banks. we rebuilt everything from scratch. that allows us to build a fudge analogy that did not exist before. for example, not requiring any kind of personal guarantee on business cards. or having extremely simple expense management on your card. taylor: how are you expanding outside the traditional syntax world? i am thinking commerce or life-sciences. are you taking on clients from those sectors? henrique: we are basically of the view that you cannot fool businesses together into one thing. a start up e-commerce company in a hotel and restaurants, they are completely different businesses. in the future, a lot of the businesses will be catered to
11:16 pm
the verticals instead of being generic to s&p's. the same way in the consumer world, there are focuses on millennials and banks. we think in businesses, it will start to be on verticals. taylor: we have been showing your valuation, getting a new $2.6 billion valuation over the summer. i asked a lot of the unicorns in here if it is helpful or hurtful given the extra scrutiny that comes with now being valued at more than $1 billion? henrique: i think for us as a financial services company, it is more on the helpful side. brex is a fairly intense capital business because we are lending money. in order to lend money, we need money. to establish with our customers and stakeholders, the valuation definitely helps, but more than that, being able to raise a large amount of money is what is enabling us to go and disrupt this sector of financial services, which is full of very big and established banks.
11:17 pm
it is hard to do that without the money. taylor: is it easier to go public rather than staying private if you are taking on the big large established banks? henrique: i think being public is part of a company's life. it needs to be the right state of maturity. even though brex was valued at 2.6 billion dollars, we were a young company. we were founded in march roughly 2.5 years ago. we will get to our stage and going public but we are still young and outward element. taylor: you talked about doing more verticals. what is the appropriate strategy outside an ipo? could it look at being bought out or being sold up into one of the verticals you mentioned? henrique: we definitely want to stay independent. i think that because of the success of other startups, there is a lot of money in the private markets.
11:18 pm
we have been able to raise over $300 million on the private market. that has been a lot compared to what a company was able to do 10 years ago or 20 years ago. for sure, now you can stay longer private and still raise a lot of money, but we for sure want to stay independent. taylor: where do you go next in 2020? henrique: in 2020, making our second product, brex cash, work, which is basically bank management. a cash management account. companies can do wires and earn yield on their money. taylor: always a pleasure. thank you to brex ceo henrique dubugras. coming up, making money while you shop. a japanese e-commerce site wants to help you do just that. we will hear from the rakuten's president. that is next. "bloomberg technology" is livestreaming on twitter. check us out on technology. be sure to follow our breaking news network on quicktake on twitter. this is bloomberg. ♪
11:19 pm
11:20 pm
11:21 pm
taylor: let's take a look at today's top calls. starting with microsoft. received a massive growth potential in the cup competing business. it was on clearly won the first phase of current spending. the next will be dominated by microsoft as it significantly narrows the gap over the coming years. downgraded to a sell from neutral. the company's revenue is expected to decline next year. the company losing market shares as huawei will try to support non-us suppliers. it would not be enough to offset the declines in other instances, the analyst wrote. guggenheim analysts with a buy rating and a $90 price target.
11:22 pm
saying it is well-positioned for small and medium-size businesses. the company's effort to move upmarket can drive sustainable growth in medium-term. those were a look at the top tech calls. it is the final stretch of holiday shopping season. one e-commerce platform is confident it can attract with the best deals at a cashback program, but how does the chinese online retail company make money? rakuten's president spoke to bloomberg's alix steel in an exclusive interview about their business model. kristen: the holiday shopping season is really interesting this year, particularly because we have one less week between
11:23 pm
black and christmas this year. so what we are seeing is unprecedented deals at a massive amount of retailers. you are definitely seeing market places pop up in a big way. their deals are aggressive but also an interesting direct to consumer world, we have a lot of retailers like all of these smaller players that are increasingly taking a place in the retail stage this year. alix: where are they shopping? is it going to be e-commerce, retail stores? what areas are seeing the biggest uptick? kristen: in terms of where people are shopping right now, we saw a lot of aggressive e-commerce shopping around cyber monday this year. cyber monday was definitely more than black friday when everyone came out to play. with the consolidated time between black friday and cyber monday and christmas this year, it will change the patterns of consumer spending. we saw a big pop around cyber monday. there was a bit of a lull while people got ready for the christmas holiday season. this week, it is getting really aggressive again. this is one of the last days for people to shop online before christmas, when things get
11:24 pm
shipped to them before christmas. what we will see this week is a gradual shift to things like buy online and pick up in store, and more in-store shopping. we do a few things that are attractive to consumers. we pay cashback on transactions at 3500 plus stores, which in its own right is attractive. the second thing is we have all the stores consumers want to shop at. we really have a broad spectrum of stores in the retail industry. everyone is very well represented. the third thing is we amalgamate all the deals from the retailers. we allow people to stack cashback on top of retailers sales that already exist. if they have a coupon code or a sale going on, people can start cashback on top of that coupon code and sale and then use the rewards and it gets really aggressive. a lot of value seeking customers and people looking for the best
11:25 pm
deal. alix: how do you make money? so where can you can make one for one. what is the business model? kristen: we have about 13 million members. a very large audience of people. companies pay us to send traffic to them, so they pay a commission on each of the transactions that our companies make and then we share that with our customers. so it is a pretty easy and simple business model where everyone wins. they get the traffic and our members when in terms of the cashback. alix: like walmart and target has, does not put a step over you? they don't need you as much anymore? what do you notice? kristen: not necessarily because it was a subsegment of customers for whom this is a very attractive value proposition and they shot this way regardless of who is or who is not on our platform. they will shop with the people on our platform because they are very loyal to us. even if people get better at on the, we are playing increasingly in the in-store cashback space
11:26 pm
so we offer not only online but also in-store cashback. but also, there are groups and audiences that these retailers cannot reach without us. taylor: that was rakuten president kristen gall. coming up, help wanted. must work well with robots. the finance industry is looking for a few souls who can get along with metal colleagues. we will explore a.i. in banking, next. this is bloomberg. ♪
11:27 pm
11:28 pm
11:29 pm
11:30 pm
taylor: this is "bloomberg technology" global link where we join "bloomberg daybreak: australia" to bring the latest in global tech news. i'm taylor riggs with shery ahn in new york and paul allen in sydney. let's take a look at the top global tech stories of the day. paul? paul: another google employee says she was fired for illegally advocating for labor rights within the company. she says she was terminated on friday. she had developed an notification that told her colleagues they had the right to participate in labor organizing if they visit antiunion websites. she says google told her she violated security policies. the u.s. government is weighing new limits on sales of chips and other vital components to
11:31 pm
huawei, sparking another furious round of lobbying. the industry associations representing u.s. chipmakers, software companies and manufacturers have written to secretary of commerce wilbur ross in recent weeks, arguing against the changes. asking the administration to at least hear them out before introducing tougher rules to close what u.s. officials consider loopholes as american companies keep working with huawei. gojek is preparing to buy 10% of blue bird, according to people close to the deal. gojek would pay about $30 million for over 20% above blue bird's two-day close. they would consolidate as they face competition from grab holdings. those are the top global tech stories we are watching. shery: thank you.
11:32 pm
robots have replaced thousands of routine jobs in wall street and now they are coming for higher-ups. marcos lopez de prado, a cornell university professor and former head of machine learning at aqr capital, testified in washington earlier this month about the impacts of artificial intelligence on capital markets and jobs. he joins us in new york. always great to see you. thank you for coming in. we have seen the changes because of machine learning in finance, but how much faster could these changes occur and what is riding this wave of change? marcos: it's data. today, we have data sets that were not available two to three years ago. the only way to utilize these complex techniques. shery: when you say data, how is this different from, say, 10 years ago to a few years ago? how fast has the change been? marcos: we had data from satellite images, credit card transactions, or even data that comes from narratives. reading stories.
11:33 pm
extracting sentiment from news articles. these data did not exist before and today they exist. if we can extract information that is valuable to making decisions. taylor: i wonder if this is a zero-sum game. if the machines and robots learning wins, then high finance jobs lose, or is there a way to retrain employees? marcos: there is definitely a way to retrain employees. as a matter of productivity, not all of them will retain their jobs, but in many cases, we can retrain. they augment their capabilities. they don't need their jobs to be completely automated, but they can assist in making better decisions.
11:34 pm
shery: how vulnerable is the finance industry to crowdsourcing and engineering other fields, and what could do to the hedge fund industry? marcos: we can cloud serve the forecasting of prices on all asset classes. a job that so far has been done by a very narrow set of funds. now you can turn this to the entire community. people working at nasa, national labs, pharmaceutical companies. they can use their expertise to forecast returns and turn these decisions into investment products. taylor: i found it fascinating in your testimony when you were talking about renaissance capital for example, which has been one of the early adopters of machine learning.
11:35 pm
how far off are we from this becoming a crowded trade where everyone uses this that those outside returns are no longer outside? marcos: it is a very small percentage of the assets under management. when you think about the tens of millions of dollars being invested today using discretionary decision-making processes or even quantitative decision-making processes not based on machine learning, there's a lot of room for deploying these algorithms. this is not a crowded train by any means. shery: we are seeing investment unskilled individuals but also students. you have to train the students to actually go and work with the data and the algorithm. what happens if you continue to see the u.s.-china trade tensions and you educate them here? visa procedures become harder and these people leave the u.s.? marcos: these are one of the concerns that many professors have, especially at technical disciplines. 90% of our students are here on a visa.
11:36 pm
most of the students will graduate and not be able to stay in the u.s. as a result, we are training our competitors. shery: how many of your students come from abroad? marcos: more than 90%. shery: and they all have to go back? marcos: in most cases, if they don't get a job within months of graduation, they will be invited to leave the country. taylor: what is your prescription for success? we all need to become coders? marcos: i don't think so. you think about the agricultural industry, there's a lot of automation going on today with self-driving cars, sensors, drones. farmers don't need to become coders, but they need to adapt and be able to interact with this technology. the same will happen with finance. the essence of finance is data. the only reason you are able to make a return in excess of the market is because you hold information. in order to extract information from data sets, you need to use machine learning. shery: when it comes to the congressional hearing we had, lawmakers were concerned about bias, whether it is racial bias and so forth in artificial
11:37 pm
intelligence mechanisms. is that easy to fix? marcos: not easy to fix, but definitely it is easier to identify bias in an algorithm than a human. a human will make a few hundred decisions in a year. to identify whether a human is biased is very difficult. we can have millions of controlled experiments to identify bias. if there is biased, we can correct it. an algorithm that was biased before the correction will not be afterwards. there is this risk of bias, but i am much more concerned in bias in human decisions. taylor: fascinating. thank you, marcos lopez de prado, professor of cornell university. plenty more global stories ahead. this is bloomberg. ♪
11:38 pm
11:39 pm
11:40 pm
taylor: this week, we are turning back time to the beginning of 2019 and breaking down the biggest tech companies, trends and stories. today, we are focusing on apple. it was the shocked apple system that sent investors rambling. in a january letter, tim cook cut the company's forecast. "we did not see the magnitude of the economic deceleration, particularly in greater china." established relationships with china have been under the microscope all year. the global smartphone slowdown and trade tension. apple might have an edge over its competitors when it comes to president trump and possible tariffs. president trump: you have put a really big investment in our country. thank you, tim apple. taylor: a relationship that the president seems to take to heart. president trump: others go out and hire very expensive
11:41 pm
consultants and tim cook called donald trump directly. taylor: that may be paying off her apple the long-term when it comes to washington, like in november when trump toured the texas plant after moving from china. president trump: we made a great deal with south korea, but we have to treat apple on a somewhat similar basis. taylor: now apple has to see if this relationship does indeed bear fruit. taylor riggs, bloomberg news. to further discuss apple's performance in 2019, we are joined by pierre ferragu of new street research. also with us, gene munster of loup ventures. pierre, let me start with you. where are we in terms of iphone sales which makes up about half of the company's total revenue? some analysts say iphone sales are great. rosenblatt says they are down 30% year-over-year. where are we in terms of iphone sales? pierre: i will take you back to
11:42 pm
the beginning of last year when iphone sales came down very significantly. that was the reason for the very strong iphone x cycle in 2018. in 2018, the cycle hid the fact that my phone users are still around but the firsthand buyer is a population that is not growing much anymore. because iphones are getting more and more expensive, they are sticking to it longer and longer. that creates a very different level in 2018 and 2019 and towards the end of 2019. what we had is a fairly successful cycle. that is why you hear so much feedback from the market. on the one hand, they are very obvious indications that the iphone 11 was very well received. people loved it. at the same time, you still see in the market an element of weakness.
11:43 pm
the fact you had 117 million iphone x's sold in 2018 and 2019. and, that is a lot of funds. people who have them in hand are kind of relaxed with the idea of sticking with them a little bit longer than the past. taylor: gene, do you agree it has been a relatively successful upgrade cycle for apple? gene: yeah, relative to where we started the year. to kind of put some parameters on it, iphone started the year about down 20%, 16%-20%. now, it will probably be down a couple of percent or flat unit growth. you could back into it for the december quarter. success in context, absolutely from where we came from. i think the franchise still has significant upside in terms of expanding where they are at based on over the next few years.
11:44 pm
that is not a consensus view. not that apple, iphone will have 20% global market share but i think they can over the next three-year cycle around 5g could inch up some of the market share. taylor: how much of that global market share is highly dependent on china, and frankly, beating out huawei over there? gene: a lot of it is. china is 17% of overall revenue. mainland china is probably 14%. if you look at total units globally sold smartphones, it is in the 15% to 20% range. apple under indexes in china because it is an expensive product. i think what has really stood out over the last nine months for me relative to china and apple is not the fact we have
11:45 pm
gotten into some sort of agreement on the trade, but rather how the chinese government, which is an important part of how the chinese consumer thinks about apple, the chinese government has treated apple. specifically, we watched social media over in china and we have always been surprised, which is curated by the government. through this period, the chinese government has been neutral to supportive of apple. when we think about the opportunity around china, whether it is 5g or the current iphone cycle, we think apple is unique in that it is one of the few tech companies that has a play, which will probably be china, one of the best growth stories over the next several years. taylor: pierre, what are your thoughts and apple and making games in china, staving off huawei and any sort of nationalism in china? pierre: i think it is difficult to say, difficult to generalize. we see iphone revenues significantly down year on year in china. as gene mentioned, it is an expensive product that became even more extensive. it costs a lot.
11:46 pm
i have not come across any data clearly outlining nationalistic sentiments hurting the iphone, but we have a lot of anecdotal evidence so it probably plays a role. at the end of the day, when this very strong weakness for china popped up for the first time in the first quarter, we did an analysis. about 20% of the weakness was really china related and 80% of the weakness was more related to the cycle in which the iphone was. still on the back of the very strong first iphones, with underlying demand eroding and increasing prices. china behaves like you would normally. i tend to see china as a market slightly behaving worse than others with very specific features, but the main moving parts are still an expensive phone getting even more expensive. taylor: i want to take a look at a chart that i am showing inside my terminal. i want to switch from iphone to the ever more important services revenue. they are becoming more and more dependent on the services revenue for growth. what is the biggest risk to apple as they become more and more dependent on that services
11:47 pm
revenue? pierre: thanks. you know, the notion of risk is very relative. the sustainability and stability of the business. you don't really have risk. now, the risk i see -- it has been extremely well. it has been improving. apple has been able to capture more and more money from its partners for, like access to give them iphone users, in particularly google.
11:48 pm
very high margin money flowing into apple over the years. going forward, yes, apple still has much better growth in services than hardware, because they have 400 million to 500 million people buying iphones. the other half of the market is secondhand users. these people buy services. that population is still growing. monetizing services. what apple did in the last 12 months, the tv service, etc. all of that will continue to drive revenues but the service margin will come down. i'm worried that when you do
11:49 pm
services like that, like samsung, if you are not a phone manufacturer, it is good for you because it is increasing the quality of your ecosystem. the quality of apple's ecosystem is already at level 100. you cannot improve it. the iphone users are already very sticky. the actual profitability of these new services, i'm not very convinced. it is a very competitive market. taylor: let me pose the same question to gene. you talked about these new services like apple tv plus. where did you want to see the company really expand as you look to 2020? $100 billion on cash, you might be spending on apple tv plus content. where do you want to see this company really focused on in 2020? gene: in terms of the cash, it is the path they talked about to be cash neutral, which would essentially return an additional $100 million on top of their current program back to investors. think of this as a measurable lever to the stock going higher. that is one piece.
11:50 pm
the second piece which will be a big part of the story beyond 5g will be what is happening beyond wearables. they give enough data points. we look at 24 data points over the last, call it four years, that they have given high-level data points. what is happening around wearables which is 8% of revenue -- it is staggering. the growth rate a year ago was low 30%. the most recent quarter, probably 65%. this acceleration right now of 8% of overall iphone owners own an apple watch. what does that mean as we think about 2020? whether it is airpods or watch, i think that is going to become a bigger part of the story. specifically, the non-iphone business which is putting services at 20%. that is 30% of the business going at all cylinders right now. i think that will be a big part of the story next year, the wearables.
11:51 pm
the watch was a big disappointment out of the gate, and so largely was airpods. now we are starting to see consumers be more open to these types of devices. taylor: we only have about a minute left. i will take a look at a chart i am showing inside my terminal and follow along with those comments. to become cash neutral in 2020, where did you want to see the company spend their cash? pierre: oh, so, i think -- i'm fairly relaxed of where to spend the cash. as i told you, this company -- there's no emergency to spend cash on anything. the one thing i will say to you is if apple wants to be a real player in asia, they need to spend much more than what they
11:52 pm
spend so far. you look at the amount of money spent by amazon, netflix, other streaming players, the scale of competitors like disney, it feels like today, apple is trying to see what they can get out of it. one thing they can do next year is actually invest much more into content and push more aggressively. taylor: cash for that content. pierre ferragu of new street research and loup ventures' gene munster. now, we will have much more coming up next. this is bloomberg. ♪
11:53 pm
11:54 pm
taylor: now to the top story on the terminal. the u.s. government is weighing new limits on sales of chips and other vital components to huawei, sparking another furious round of lobbying by technology companies. industry associations representing u.s. chipmakers, software companies and manufacturers have written to secretary of commerce wilbur ross, arguing against it.
11:55 pm
they urge the president's administration to hear them out before introducing rules, but u.s. officials consider loopholes levying american companies with working with huawei. that u.k. announced a merger probe into google's $2.6 billion u.s. takeover of looker, a week after the antitrust watchdog raised concerns about amazon's purchase of a minority stake. google about the u.s.-based computer software firm for its cloud unit. u.k. regulators set a deadline of february 13 to make a decision in this first phase review. u.s. regulators cleared the deal in november. finally, from capitol hill, a compromised spending bill is not likely to include an expansion of tax credit for electric vehicles. bloomberg has learned a white
11:56 pm
house officials told lawmakers including the measure could cause the bill to fail. conservatives view the tax credit is mainly benefiting tesla and californians. that does it for this edition of "bloomberg technology." and, "bloomberg technology" is livestreaming on twitter. check us out, @technology. be sure to follow our global breaking news network, @quicktake, on twitter. this is bloomberg. ♪
11:57 pm
11:58 pm
11:59 pm
12:00 am
>> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. the following is a paid commercial program paid for by nutrition. these statements have not been evaluated by the fda. the product is not intended to diagnose, treat, or prevent any disease. this content is for educational purposes only. it's not intended to provide medical advice or take its place or treatment from a professional physician. jordan rubin is one of america's most recognized and best health experts. he's


info Stream Only

Uploaded by TV Archive on